Just in case you were having a bad day, allow me to provide some sunshine.
RBS Issues Warning that China Credit is About to Burst
I’ve seen the coastal real estate bubble inflate first hand and it is quite real. You would not believe our monthly rental payments. And I have direct comparison, as I own a similar amount of plant and office space in the USA. Labor is cheap in China, but land is ghastly expensive and getting worse daily.
Will a real estate bust have the impact the Japanese bubble had on that economy? My guess – based on no data and only my intuition – is that it would be worse. But that does not mean China collapses back to the hell years of the 1970′s.
As Frank A. Weil of The Atlantic notes in his recent article, Japan stuck in the doldrums is still a very prosperous place. I suspect China will be much the same, at least on the coast.
However, it may be the case that we see Chinese versions of the “modern” Detroit. I’ve not seen it myself, but I’m told China has its own Rust Belt in the north, hopefully not this bad.
Now don’t you feel better?
← PreviousChina is experimenting with VAT reforms in Shanghai this year. If you are doing business in Shanghai, ignoring the changes could mean missing an opportunity … Continue reading
© 2011 Passagemaker China
All Rights Reserved.